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                                        1.0 Preamble

                                        In India, Bamboo forests occupy approx. 10.3 million hectares, of which 28% of is located in the North-East, comprising more than 100 species of Bamboo. Though Bamboo is used for handicrafts, food product, construction material, etc. however, most commercial use of bamboo is for the production of Pulp & Paper. Approx. 12 lakh residents of North East are directly or indirectly dependent over Bamboo harvesting, as such, bamboo harvesting is the backbone rural economy of NER.

                                        2.0 Salient Feature of Bamboo

                                        w Bamboo is perennial evergreen plant in the grass family Poaceae.
                                        w Bamboo is made up of Fibre, lignin & moisture. Paper is made of fibre after removing lignin.
                                        w Compared to other agro product, bamboo fibre has good fibre length.
                                        w Supreme Court has categorically recognised that bamboo and cane belong to grass family.
                                        w Since bamboo belong to grass family and grow profusely and naturally regenerated through rhizome & seed naturally fast growing species. Harvesting of bamboo does not impact environment and due to this reasons, it is considered to be environmental friendly.
                                        w Freshly cut Green Bamboo contains moisture of 50%
                                        w Air Dry Bamboo mean bamboo dried under open air. Air dry bamboo means more material & less moisture.
                                        w While determining Air Dry Bamboo, the moisture considered to be 10%. If moisture contain is more than 10%, pro-rata deduction/penalty are made.
                                        w Air Dry Bamboo is rarely procured now unless becomes absolute necessary.

                                        3.0 Bamboo in North Eastern States

                                        Assam is the largest bamboo producing states of India and main bamboo growing areas are the districts of Cachar, Karbi Anglong, North Cachar Hills, Nagaon and Lakhimpur.

                                        Nagaland have a structured policy for the promotion and development of bamboo Industry ant the predominant area are districts of Dimapur, Peren, Mon and Mokokchung.

                                        Tripura also has structured policy for development of bamboo sector. It extracts is 184.60 million bamboo p.a. Most common uses are housing and supply to paper mill in Assam. However, a small percentage is utilized for handicrafts related products.

                                        Mizoram: Mizoram is richly endowed with bamboo forests (6,446 sq. km), covering 31 % of the area of the State. The growing stock is estimated at 25.3 million tonnes, and the potential availability at 5.8 million tonnes.

                                        4.0 Annual Paper Production Target

                                        HPC is having two paper manufacturing units

                                        w Nagaon Paper Mill(NPM), Jagiroad, Assam
                                        w Cachar Paper Mill(CPM), Panchgram, Assam
                                        w Annual Paper Production Target of each unit ( NPM & CPM ) : 1.00 lakhs MT

                                        5.0 Annual Requirement of Bamboo

                                        w Bamboo requirement for each unit : 3.75 - 4 lakhs MTG p.a (1 MT paper requires approx 3.75 MTG bamboo) including one month buffer stock

                                        6.0 Structure of commercial Bamboo harvesting

                                        6.1 Private sources (NPM & CPM)

                                        w Species: Bamboosa Tulda (Jati), Vulgaris, Balcooa (Bhaluka)
                                        w Ownership : Private Plantation, Community Forest, Village Forest
                                        w States : Assam, Meghalaya, North Bengal, Arunanchal Pradesh, Nagaland, Mizoram, Tripura, Manipur

                                        6.2 Lease Bamboo (NPM & CPM)

                                        w Species: Dendrocalamus hamiltonii (Kako), Neohouzeaua dulooa Syn. Teinostachyum dulooa (Dolu), Melocana baccifera Syn. Melocana bamboosaaides (Muli), Oxytenananthera  parviflora (Hill Jati)
                                        w Ownership: Govt Land under Forest Deptt, & Autonomous Council
                                        w  State: Assam
                                        w Geographical Location: Karbi Anglong ( KAAC) North Cachar Hill Autonomous Council ( NCHAC)

                                        7.0 Bamboo Procurement Season - Salient features

                                        As per the forest silviculture norms , forest operation are ceased during Monsoon season ( May to Sep ) for forest regeneration & wildlife breeding. Moreover, during rainy season, flood and heavy rainfall makes the forest inaccessible for bamboo operation.

                                        Hence bamboo procurement is seasonal in nature and sufficient bamboo is to be stocked (buffer stock) for manufacture of Pulp & paper during lean season.

                                        NPM

                                        w Normal season: Oct to April( 7 months)
                                        w Peak season: Nov to March
                                        w Lean season: May to September (5 months)
                                        w Leanest season: June to August

                                        CPM

                                        w Normal season: Oct to April( 7 months)
                                        w Peak season: Nov to March
                                        w Lean season: May to September (5 months)

                                        8.0 Bamboo Procurement Policy for NPM & CPM

                                        For production of one lakh tonne of paper and to maintain a reasonable level of bamboo stock, both unit needs has to procure around 4 lakh tonnes of bamboo every year.

                                        NPM procures bamboo through three modes, viz. Gate Purchase System (GPS), Road and Rail. A single mode cannot meet the robust bamboo requirement of the Unit. Currently green bamboo is only procured in both the mills.

                                        NPM

                                        Therefore, procurement is done from all the three sources. The procurement during last 5 years from NPM from different sources is as below:

                                        FY

                                        2011-12

                                        2012-13

                                        2013-14

                                        2014-15

                                        2015-16

                                        GPS

                                        115226

                                        67866

                                        67842

                                        78910

                                        71480

                                        ROAD

                                        197927

                                        76169

                                        162338

                                        221759

                                        76294

                                        RAIL

                                        153054

                                        41763

                                        132132

                                        5720

                                        47188

                                        Total

                                        466207

                                        185798

                                        362312

                                        306389

                                        194962

                                        ** Small quantity of wood was procured during FY 2011-12 but discontinued due to its cost ineffectiveness.

                                        CPM

                                        Cachar Paper Mill (CPM) is not in operation on account of blanket ban imposed by National Green Tribunal (NGT) on mining and transportation of coal from the state of Meghalaya w.e.f May 14th 2014, from where CPM used to source 100% of its coal requirement and even prior to it, it has been operating at sub-optimal capacity owing large scale flowering in NER. As such bamboo procurement figure of CPM in last five years are not relevant to give true picture, hence not placed.

                                        8.1 Procurement policy in detail

                                        NPM

                                        i) Gate Purchase Scheme (GPS)

                                        This scheme has been floated to encourage marginal farmers, small traders whereby they can offer/deliver even one truck load of material, collect the payment directly after against the supplies without involvement of any middle man. There is no quantity/contractual obligation, prerequisite for submission of EMD or security deposit, penalties are not applicable on the part of supplier.

                                        This source is vulnerable to the external factors such as Natural Calamities, social festive and fund constraints. The arrival pickups is Oct, peak during Dec to March and almost dries up April.

                                        Approx 28-30 % of the requirement can be met from this source.

                                        CPM

                                        Bamboo harvesting in catchment area of CPM is very much less vis a vis NPM hence very small quantity of bamboo is procured under GPS in CPM .

                                        ii) Procurement through Road

                                        NPM

                                        The next important source of procurement which is comparatively costlier than GPS but cheaper than bamboo procured through Rail. This source is tapped by way of tender. As such, it has an obligation of contractual quantity, security deposit, penalties etc. This source is comparatively more consistent vis-a-vis arrival of GPS.

                                        CPM

                                        The unique feature of procurement of bamboo in CPM that even during monsoon season, sizable quantity of bamboo comes from private plantation of Mizoram through river bed upto Katakal depot & near Katlikara depot(Halakandi district) and onwards road transportation upto mill.

                                        The tenders are floated on FOR basis.

                                        For NPM to reach the procurement target of 4 lacs MT of bamboo , approx 50 - 55 % of the requirement are to be met from this source.

                                        For CPM to reach to the procurement target of 4 lacs MT of bamboo, approx 85 % has to tapped from this source.

                                        iii ) Rail:

                                        NPM & CPM

                                        The third important source of bamboo procured by way of rail. This source is a costliest source vis-a-vis road and GPS.

                                        This source is least affected to the natural calamities, festive and other disturbances . Since large quantities comes at a time, it helps building up stock. Unlike GPS & bamboo by road, since Rail sources are well connected by rail, as such, this source is exposed to the competition from other paper mill which is direct bearing on the price offered to HPC. If the demand from competitive mill are high, price goes up and vice-versa.

                                        For NPM the areas covered under this source are Lower Assam, Upper Assam, and North Bengal.

                                        For CPM North Cachar Hill Autonomous Council (NCHAC).

                                        Since this source is well connected with rail link and least affected to natural calamities, festive and other disturbances, as such, even during lean season, adequate quantities are available.

                                        Since decades, HPC has been tapping the entire source.

                                        For NPM for reaching to the procurement target of 4 lacs MT of bamboo , approx
                                        18-20% percent has to tapped from this source.

                                        For CPM for reaching to the procurement target of 4 lacs MT of bamboo , approx 10% percent has to tapped from this source.

                                        9.0 Rate Mechanism

                                        Gate Purchase Scheme (GPS)

                                        There is a mechanism for collecting/finalising the price for GPS. A Committee makes the survey of the nearby areas within the radius of 50 Kms and concludes a price, attractive enough to cover the cost of bamboo harvesting, transportation cost and other incidental expenses in supplying to HPC. The prices are reviewed at times when the arrivals are inadequate than the previous trend.

                                        The present rate of GPS is Rs 2250 PMTG (Exclusive of Tax)

                                        Road & Rail

                                        As per the policy, road bamboo is procured on delivered ( FOR ) basis.

                                        Since railways has differential freight policy for the peak season and rainy (lean) season , therefore for both NPM & CPM rail bamboo is procured on ex-source basis. Taxes and railway freight reimbursed at actual.

                                        At present w.e.f. 1st October , 2016 Assam Government has waived the incidence of VAT on procurement of Bamboo from Assam.

                                        10.0 Procurement Procedure

                                        HPC follows a transparent tendering procedure.

                                        At present, since most of the bidders are from NER and are not fully conversant with e-procurement system, it could not be implemented. However , they are being persuaded and trained for process of registration with service providers.

                                        The e-procurement shall be done onset of next procurement season.

                                        HPC has Procurement Manual Guideline PMG (Effective Sept/2005-Under Revision). The purchase and procurement activities are carried out in compliance with PMG.

                                        The procedure is as follows:

                                        10.1 Mode & Type of Tendering

                                        a) Open Tender - Thorough press and website
                                        b) Short Tender - In case of exigencies, short tender are also floated through advertisement.

                                        10.2 Salient features of tendering

                                        a. As per the requirement, Tender notices are also published in newspaper preferably in Business Standard. Tenders floated from units are also published in North East based leading newspaper. Also uploaded in HPC’s website www.hinpaper.in

                                        The vendors have the flexibility to quote on date or before the due of opening.

                                        b. Co-operative Societies: Societies resisted under society act can also participate in tender and 20 % quantity is reserved for them.

                                        c) Specification: The standard specifications are mentioned in NIB.

                                        d) Earnest Money Deposit (EMD): EMD is Rs. 20 PMT of the quoted quantity.

                                        Co-operative Societies are exempted from EMD.

                                        If the outstanding of a vendor is overdue, at times, on request of vendor, EMD are also adjusted out of there outstanding.

                                        e. Bids are called in two parts:

                                        i) Techno- commercial bid ii) Price Bid

                                        f. On due date bids are opened online.

                                        w If in the first invitation, no offers are received, on the due date of opening is extended.
                                        w If in the first invitation, single bid is received, then tender is cancelled as per CVC guidelines and re-tendering is done.
                                        w Even after re-tendering only single offer is received, it can be processed.
                                        w Corrigendum, Extension and Re-tendering notices are uploaded in HPC web site.
                                        w After opening of the tender , technical bids are evaluated.
                                        w In NIB, there is a provision for a bidder to quote for minimum offered quantity. If any bidder quotes less than the minimum offered quantity, is subject to cancellation, without assigning any reason. Their price bids are not opened.

                                        g. Estimates: Prior to opening of price bid , a committee is constituted who makes a survey of the market and prepares a estimate price , as a base price, for the tendered commodity.

                                        h. Only the price bids of qualified bidders are opened.

                                        i. Rates for road bamboo are called FOR ( Delivered basis).

                                        j. However for rail source rates are called on ex source basis.

                                        w In NIB, there is also a provision for splitting of orders among the bidders, as per the apportionment Clause.
                                        w Distribution of quantity, among the bidders is done as per the apportionment Clause subject to acceptance of L-1 rate.
                                        w L-1 bidder is given the first opportunity to supply.
                                        w If L-1 bidder has offered the minimum offered quantity, then the bidder is given the first opportunity to accept additional quantity as per the apportionment clause of NIB.

                                        k. Security Deposit (SD)

                                        w Normally 5% of the contract value is taken as Security Deposit.
                                        w EMD of the successful bidder(s) is converted as Security Deposit.
                                        w The difference between EMD and SD can be deposited by way of RTGS/Cheque/Bank Guarantee ( BG)
                                        w In order to give comfort to vendors, SD can also be built up by way of deduction from the running bill.
                                        w If the outstanding of a vendor is overdue, SD can also be adjusted out of the same.

                                        l. Penalty Deduction: Penalty clauses are mentioned in NIB. Deductions are made in accordance with the same.

                                        m. Credit Period: Credit period are normally ranges between 15/30/90 days depending upon the commodity. However, it also changed on need basis in exigencies but it is equal to all vendors.

                                        Due to Working Capital constraint, the Corporation has not been able to adhere to the payment schedule prescribed in NIB.

                                        n. Payment Mode:

                                        i) RTGS

                                        ii) Letter of Credit (LC) are established for the full or partial value of the material subject to availability of ILC limits, with usance period of 90/180 days for supplies made prior to 90 days.

                                        iii) Bill discounting

                                        o. Assignment Order:

                                        Scenario Nos. 1

                                        After floating of tender, in the event of exigencies, pending finalization of tender, assignment orders are placed on the bidders, who have already participated in the tender, subject to their agreeing to accepting of L-1 rate after finalization of tender.

                                        Scenario Nos. 2

                                        Assignment orders are also placed to new vendors in the following scenario:

                                        a) The source is new
                                        b) Existing bidders are not supplying.
                                        c) There is a delay in supplying of materials.

                                        Assignment Orders are placed on the same rate, terms and conditions or lower than the existing L-1 rate.

                                        p. Developmental Order: HPC has a policy to encourage and develop new vendors to increase competition . To achieve this objective , in NIB , 10 % quantity is reserved for the new vendors who, though have participated in NIB , however are not meeting the PQC. Said 10 % of the quantity is equally distributed among such new vendors subject to acceptance of L- 1 rates and other standard terms & conditions.

                                        q. Spot Purchase: In the event of extreme exigencies, spot purchase are also done at unit level by a committee.

                                        Assignment order, trial order, spot purchase constitute a very small percentage of the total procurement.

                                        r. Repeat Order: There is a provision for repeat order. Quantity of an order may be increased against a purchase order /contract , provided that:

                                        a) Period not exceeding 1 (one) year from the date of original order.
                                        b) There has been no downward trend in price, confirmed by a committee.
                                        c) There is no change in rates, terms and conditions of the original order.
                                        d) Quantity not exceeding original order quantity

                                        s. Delivery Of Materials: Vendors has to deliver the materials to stores directly or through approved transporters on freight to pay/paid basis as the terms stipulated / specified in the purchase order.

                                        Information of receiving and acceptance of the materials is given by stores to Purchase by sending a copy of Goods Receipt Voucher (GRV) which is uploaded in ERP.

                                        t. Sampling: In case on procurement of Air Dry bamboo only, Joint Samples are drawn and tested in HPC lab and based on the test results payment are released.

                                        u. Release of Payments: Payments are released after receipt & acceptance of material at site and completion of all procedural formalities.

                                        Due to Working Capital constraint, the Corporation has not been able to adhere to the payment schedule prescribed in NIB.

                                        11.0 Bamboo Resource Development

                                        HPC is committed to develop bamboo resource across Assam & NE region through following:

                                        a) Tissue Culture Laboratory:

                                        Salient features

                                        Installed: Jan 2006
                                        Operation Start: Oct 2008
                                        Verities Propogated: Bambusa tulda (Jati), Bambusa balcooa (Bhaluka) and Bambusa nutans (Makal)
                                        Production Capacity: 3.5 lakhs Tissue Culture Plantlet(TCP) (2 shift)
                                        Total Production till today: 16.00 lakh Tissue Culture Plantlet (TCP)

                                        Marketing & Propagation

                                        Rate: Rs 20 per Tissue Culture Plantlet (TCP)
                                        Buyers of TCP: Private Plantation, Universities, Forest Deptts of different state, research institutes, farmers, etc.

                                        Accreditation:

                                        Department of Biotechnology, Ministry of Science & Technology had given Certificate of Recognition in March 14, 2014, through Biotech Consortium India Ltd (BCIL) New Delhi.

                                        It is the first and only accredited, largest commercial Tissue Culture Laboratory in the North East India.

                                        b) Farm Forestry:

                                        NPM has implemented Farm Forestry Scheme since 1987 and distributed 3.65 lakh nos of bamboo rhizome and 18.34 lakh seedlings were planted in different district of Assam.

                                        NPM is also giving high yielding Plantlet developed in TC- Lab at a subsidised rate to farmers, growers.

                                        Forest Department of different state are also procuring plantlet from HPC.

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